'No plans' for national insurance rises - Treasury

Alex Allinson said "there will be some who will be looking at the island as a low-tax jurisdiction close to the UK perhaps as a base"

The Isle of Man's Treasury minister says he has "no plans" to mirror an increase to national insurance contributions for UK employers in his next budget.

UK chancellor Rachel Reeves has unveiled tax rises worth £40bn, including a jump from 13.8% to 15% on national insurance payments for UK companies.

Alex Allinson said while the island did not have to follow suit, a Tynwald debate next month would consider the "long-term sustainability" of the Manx fund.

However, he confirmed some measures announced on Wednesday would be implemented on the island, such as an increase to duty rates for tobacco products.

The cost of most tobacco products will rise immediately by the retail price index (RPI) plus 2%, with the rate for hand-rolling tobacco increasing by an additional 10%.

Alcohol duty rates for non-draught drinks will increase in line with the RPI from 1 February, however, duty on draught drinks would fall by approximately a penny on an average pint.

When an increase to the minimum wage for adults is introduced in the UK in April, it will rise to £12.21 an hour and outstrip the Manx rate of £11.45.

VAT of 20% would also be applicable on the island to private school education from 1 January, which is set to affect the island's only private school King William's College.

In accordance with the customs and excise agreement with the UK, the Isle of Man will continue to apply the cut in fuel duty by 5p per litre which has been extended for a further 12 months.

'Strong focus'

The Budget also confirmed the UK government will abolish the non-dom status from April 2025, replacing it with a residence-based regime.

Allinson said "there will be some who will be looking at the island as a low-tax jurisdiction close to the UK perhaps as a base".

He said that would create "opportunities, but we also need to be aware that the new Labour government have a strong focus on tax avoidance and there could therefore be increased scrutiny and pressure on the Isle of Man, and Jersey and Guernsey, about our own tax laws".

The department would continue to "examine the full impact of the announced changes for our island", he added.